Impact of mergers and acquisition on private sector banks in global economy

Type :

Term papers

Pages :

5 pages

Format :

.doc

Published date :

09/21/2009

Category :

Business & market

Sub category :

Management

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Summary :

Abstract
Introduction
Objectives of merger and acquisitions in banking industry
Benefits of merger and acquisition
Problems in merger and acquisition
Merger and acquisition in banking ? Present scenario
Analysis of different profitability ratios of banks for the study period
Conclusion

Abstract

mergers and acquisitions (M & A) have been a very important market entry strategy as well as expansion strategy. This present era is known as competition era. In this era companies to avoid competition, go for merger, and enjoys sometimes monopoly. Liberalization and technological advances are increasingly pushing the banking sector towards greater globalization to improve the operational flexibility of banks, which is crucial in the competitive environment that banks operate in. The Government also proposes to recapitalize weak banks. Recapitalization of weak banks has not yielded the expected results in the past and hence should be linked to a viable and time bound restructuring plan. The process of merger and acquisition is taken in many banks in India like - Times Bank merged with HDFC Bank, Bank of Madura with ICICI Bank, etc. The researcher has made an attempt to measure the changes in the profitability and financial position of the above banks and has calculated several ratios and tested them in the light of 'T- test', to know the acceptance and rejection of the formulated hypothesis. The researcher has found that overall the merger and acquisition does not effect of the financial position of banks except when a weaker & non-viable banks are merged with a financially sound and profit making bank in such case the profitability of the later bank will be affected.